The chapter comprises of Meaning, Environment, Raising of Finance in International Markets, Euro Issues, GDRs and ADRs Guidelines for Raising Funds in International Markets through various Instruments; Working of International Stock Exchanges with respect to their Size - Listing Requirements, Membership, Clearing and Settlement of New York Stock Exchange, NASDAQ, London Stock Exchange, Tokyo Stock Exchange, Luxembourg Stock Exchange, German and France Stock Exchanges. The international stock market refers to all the international markets that negotiate stocks from their domestic companies. For example, you can buy stocks from Apple at the local American market, but to get stocks from the Japanese Sapporo, you need to go the international (Japanese) market. Most countries have their own stock exchange. Part of the financial system concerned with raising long-term capital through shares, bonds, and other long-term investments. EURO ISSUE: The term `euro' denotes that the issue is listed on a European Stock Exchange. A euro issue is a issue where the securities are issued in a currency different from the currency of the country of issue and the securities are sold in international market to individual and institutional investors. Euro securities are negotiable and transferable securities distributed by a syndicate of market intermediaries and underwriters, By an euro issue, a company is able to raise funds at a cheaper rate, Euro bond is an international bond issued to investors from throughout the world. A global depositary receipt (GDR) is a certificate issued by a bank that represents shares in a foreign stock on two or more global markets. GDRs typically trade on American stock exchanges as well as Eurozone or Asian exchanges. GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets. Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share. ADR's are depository receipts issued in United States of America (USA) in accordance with the provisions of Securities and Exchange Commission. American Depository Receipts (ADRs) offer US investors a means to gain investment exposure to non-US stocks without the complexities of dealing in foreign stock markets. It refers to a negotiable certificate issued by a U.S. depositary bank representing a specified number of shares usually one share of a foreign company's stock. The ADR trades on U.S. stock markets as any domestic shares would. ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available. It is denominated in US $ INFOSYS Technologies was the First Indian Company to issue ADR.

1. Stock Market Operations
Unit-V: International Stock Market
Meaning, Environment, Raising of Finance in International Markets, Euro
Issues, GDRs and ADRs Guidelines for Raising Funds in International
Markets through various Instruments; Working of International Stock
Exchanges with respect to their Size - Listing Requirements, Membership,
Clearing and Settlement of New York Stock Exchange, NASDAQ, London
Stock Exchange, Tokyo Stock Exchange, Luxembourg Stock Exchange,
Stock Exchange, Tokyo Stock Exchange, Luxembourg Stock Exchange,
German and France Stock Exchanges.
Prepared by
Mr. Dayananda H. Huded M.Com JRF, NET 3 Times, & KSET
Teaching Assistant,
Rani Channamma University, PG Centre, Jamkhandi
E-mail: dayanandch65@gmail.com

2. International Stock Market
 The international stock market refers to all the
international markets that negotiate stocks from their
domestic companies. For example, you can buy stocks
from Apple at the local American market, but to get
stocks from the Japanese Sapporo, you need to go the
stocks from the Japanese Sapporo, you need to go the
international (Japanese) market. Most countries have
their own stock exchange.
 Part of the financial system concerned with raising long-
term capital through shares, bonds, and other long-term
investments

3. Why need foreign capital
 Larger pool of capital and Lower costs due to the
potential segmentation and saturation of domestic
markets
 Diversification of country risks and associated
 Diversification of country risks and associated
economic risks
 Potential to hedge foreign exchange risk
 Increased global recognition
 Tax reduction or avoidance and Lower interest rates

4. Raising of Finance in International Markets
 EURO ISSUE:
 The term `euro' denotes that the issue is listed on a European Stock Exchange.
 A euro issue is a issue where the securities are issued in a currency different from
the currency of the country of issue and the securities are sold in international
market to individual and institutional investors.
 Euro securities are negotiable and transferable securities distributed by a
syndicate of market intermediaries and underwriters, By an euro issue, a company
syndicate of market intermediaries and underwriters, By an euro issue, a company
is able to raise funds at a cheaper rate, Euro bond is an international bond issued
to investors from throughout the world.
 These are issued as unsecured obligations.
 Indian Companies issue foreign currency convertible bonds (FCCB) which are
equity linked debt instruments, convertible into equity at a specified later date.
They carry a fixed rate of interest which is lower than the rate on any other similar
nonconvertible debt instrument.
 Eurobonds: Issued in a currency different from that of the financial centre from
which they are issued
 Almost always rated by a credit rating agency

5. GDR’s and ADR’s
 GDR’s
 A global depositary receipt (GDR) is a certificate issued by a bank that
represents shares in a foreign stock on two or more global markets.
GDRs typically trade on American stock exchanges as well as Eurozone or
Asian exchanges.
 GDRs represent ownership of an underlying number of shares of a foreign
company and are commonly used to invest in companies from developing
GDRs represent ownership of an underlying number of shares of a foreign
company and are commonly used to invest in companies from developing
or emerging markets by investors in developed markets.
 Prices of global depositary receipt are based on the values of related
shares, but they are traded and settled independently of the underlying
share.
 It is denominated in some freely convertible currency ($ & Euro)
 GDR’s are often listed in Luxembourg, London, Frankfurt, Singapore and Dubai
stock exchange.
 Reliance Industries was the First Indian Company to issue GDR’s

7. ADR’s
 ADR's are depository receipts issued in United States of America
(USA) in accordance with the provisions of Securities and
Exchange Commission.
 American Depository Receipts (ADRs) offer US investors a means
to gain investment exposure to non-US stocks without the
complexities of dealing in foreign stock markets.
complexities of dealing in foreign stock markets.
 It refers to a negotiable certificate issued by a U.S. depositary
bank representing a specified number of shares usually one share
of a foreign company's stock.
 The ADR trades on U.S. stock markets as any domestic shares
would. ADRs offer U.S. investors a way to purchase stock in
overseas companies that would not otherwise be available.
 It is denominated in US $
 INFOSYS Technologies was the First Indian Company to issue ADR.

10. Guidelines for Raising Funds in International
Markets through various Instruments
 1. A domestic company including a body or corporation
established under a Central or State legislation can raise capital
in currency other than Indian Rupee in compliance with the
provisions of Foreign Currency Depository Receipts Scheme, 2014
 2. Companies of foreign jurisdictions can raise capital in currency
other than Indian Rupee in compliance with provisions of the
2. Companies of foreign jurisdictions can raise capital in currency
other than Indian Rupee in compliance with provisions of the
Companies Act, 2013 and SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2009 as if the securities are being
issued under chapter X and XA thereof, dealing with issuance of
Indian Depository Receipts (“IDR”) and rights issue of IDR.
 3. A company incorporated in India or outside India is eligible to
issue debt securities subject to certain prescribed conditions.

11.  Requisites
 Stock Exchange: Can be formed by an Indian
recognised stock exchange or a stock exchange of a
foreign jurisdiction.
 Clearing Corporation: Can be formed by an Indian
 Clearing Corporation: Can be formed by an Indian
recognised stock exchange or a clearing corporation or
any recognised stock exchange or a clearing
corporation of a foreign jurisdiction.
 Depository: Can be formed by an Indian registered
depository or any regulated depository of a foreign
jurisdiction.

12. Guidelines for Raising Funds in International Markets
 Foreign Currency Convertible Bond (FCCB) - It means a bond issued by
an Indian company expressed in foreign currency, and the principle and
interest in respect of which is payable in foreign currency.
 One is not allowed to remit forex for investing in Foreign Currency
Convertible Bond (FCCB) issued by Indian companies in the stock market
abroad.
The Board of Directors of the company intending to issue depository
 The Board of Directors of the company intending to issue depository
receipts shall pass a resolution authorising the company to do so.
 The company shall take prior approval of its shareholders by a special
resolution to be passed at a general meeting
 The depository receipts shall be issued by an overseas depository bank
appointed by the company and the underlying shares shall be kept in the
custody of a domestic custodian bank.
 The depository receipts can be issued by way of public offering or private
placement or in any other manner prevalent abroad and may be listed or
traded in an overseas listing or trading platform.

13. Contd.
 The underlying shares shall be allotted in the name of the overseas depository bank and
against such shares, the depository receipts shall be issued by the overseas depository bank
abroad.
 Voting rights Section 6 (1) A holder of depository receipts may become a member of the
company and shall be entitled to vote as such only on conversion of the depository receipts
into underlying shares after following the procedure provided in the Scheme and the
provisions of this Act. [Companies (issue of GDRs) Rules, 2014)
provisions of this Act. [Companies (issue of GDRs) Rules, 2014)
 (2) Until the conversion of depository receipts, the overseas depository shall be entitled to
vote on behalf of the holders of depository receipts in accordance with the provisions of the
agreement entered into between the depository, holders of depository receipts and the
company in this regard.
 Proceeds of issue 7. The proceeds of issues of depository receipts shall either be remitted to
a bank account in India or deposited in an Indian bank operating abroad or any foreign bank
(which is a Scheduled Bank under the Reserve Bank of India Act, 1934) having operations in
India with an agreement that the foreign bank having operations in India shall take
responsibility for furnishing all the information which may be required and in the event of a
sponsored issue of Depository Receipts, the proceeds of the sale shall be credited to the
respective bank account of the shareholders.

14. Contd.
 Eligibility 1. The following persons are eligible to issue or transfer
permissible securities to a foreign depository for the purpose of issue of
depository receipts:
 (a) any Indian company, listed or unlisted, private or public;
 (b) any other issuer of permissible securities;
 (c) any person holding permissible securities;
 which has not been specifically prohibited from accessing the capital market or
dealing in securities.
 The permissible securities shall not be issued to a foreign depository for
the purpose of issuing depository receipts at a price less than the price
applicable to a corresponding mode of issue of such securities to domestic
investors under the applicable laws
 It is clarified that any use, intended or otherwise, of depository receipts or
market of depository receipts in a manner, which has potential to cause or
has caused abuse of the securities market in India, is market abuse and
shall be dealt with accordingly

15. Contd.
 Obligations
 1. The domestic custodian shall:
 (a) ensure that the relevant provisions of the Scheme related to the issue and cancellation of
depository receipts is complied with;
 (b) maintain records in respect of, and report to, Indian depositories all transactions in the nature
of issue and cancellation of depository receipts for the purpose of monitoring limits under the
Foreign Exchange Management Act, 1999;
 (c) provide the information and data as may be called upon by SEBI, the Reserve Bank of India,
 (c) provide the information and data as may be called upon by SEBI, the Reserve Bank of India,
Ministry of Finance, Ministry of Corporate Affairs and any other authority of law; and
 (d) file with SEBI a copy of the document, by whatever name called, which sets the terms of issue of
depository receipts issued on the back of securities, as defined under section 2(h) of the Securities
Contracts (Regulation) Act, 1956, in a permissible jurisdiction.
 2. Indian depositories shall coordinate among themselves and disseminate: a. the
outstanding permissible securities against which the depository receipts are outstanding;
and, b. the limit up to which permissible securities can be converted to depository receipts.
 3. A person issuing or transferring permissible securities to a foreign depository for the
purpose of issue of depository receipts shall comply with relevant provisions of the Indian
law, including the Scheme, related to the issue and cancellation of depository receipts.

16. Working of International Stock Exchanges
 With respect to Listing Requirement and Membership
Procedure for Listing of Securities in International SE
Step-1
• Satisfying Listing Conditions
• Standards for trading co.
Step-2
• The Application for Listing
• Listing Document, Prospectus, Memorandam, Scheme Particulars, Accounts (P&L
and B/S)
Step-3
• Approval
• All applications for listing will be processed, once they are satisfied they will
submit a report with recommendations to Membership Committee.
Step-4
• Listing
• If the Listing & Membership Committee approves the application the listing
document is then filled and the securities are admitted to the official list.

17. New York Stock Exchange
 An American stock exchange in New York City.
 Founded in 1817. Currency for trading – US $
 the world's largest stock exchange by market capitalization of its listed companies
at US$30.1 trillion as of February 2018.
 New York Stock Exchange also known as “The Big Board” provides means for
New York Stock Exchange also known as “The Big Board” provides means for
buyers and sellers to trade shares of stock in companies registered for public
trading.
 NYSE`s stock can be traded via its electronic “Hybrid Market” customers can send
orders for immediate electronic execution.
 The NYSE is the world’s largest stock exchange, offering icons and entrepreneurs
the opportunity to raise capital and change the world. Our listed companies form
a powerful community committed to good governance and societal impact.
Industry-leading trading technology, combined with the guidance of experienced
traders creates higher market quality for NYSE-market participants

18. NASDAQ
 National Association of Securities Dealers Automated Quatation.
Established in 1971.
 The First Electronic Stock Exchange in the World.
 NASDAQ provides an open, transparent and competitive
platform to enable buyers and sellers to efficiently interact and
access pools of liquidity.
access pools of liquidity.
 Computerized system established by the NASD to facilitate trad
ing by providing broker/dealers with current bid and
ask price quotes on over-the counter stocks and some listed
stocks.
 NASDAQ does not have a physical trading floor that brings
together buyers and sellers.
 All trading on the NASDAQ exchange is done over a
network of computers and telephones.

20. NASDAQ- The National Industry Leader

21. NASDAQ: National Market Listing Requirement

22. London Stock Exchange
 Located in the City of London, United Kingdom and founded
in 1801.
 London Stock Exchange is the fourth largest exchange in the
world after New York Stock Exchange, NASDAQ (National
Association of Securities Dealers Automated Quotations) and
Association of Securities Dealers Automated Quotations) and
Tokyo Stock Exchange.
 Number of Companies - 2,447 as on 31st July, 2013.
 It is the largest exchange in Europe
 It offers products like Financial markets infrastructure, Stock
exchange, Data, Analytics, Clearing

24. Tokyo Stock Exchange
 The Tokyo Stock Exchange abbreviated as Tosho or
TSE/TYO, is a stock exchange located in Tokyo, Japan.
 Founded in the year of 1878
 Currency Japanese Yen
Indices: Nikkei 225 and TOPIX
 Indices: Nikkei 225 and TOPIX
 It is the third largest stock exchange in the world by
aggregate market capitalization of its listed companies, and
the largest in Asia.
 It had 2,292 listed companies with a combined market
capitalization of US$5.67 trillion as of February 2019.
 On 01 January 2013, it was merged with Osaka Securities
Exchange to form Japan Exchange Group.

27.  JASDEC: Japan Securities Depository Center Inc.

28. Luxembourg Stock Exchange
 The Luxembourg Stock Exchange (French: Bourse de
Luxembourg) is a stock exchange based in Luxembourg City,
in southern Luxembourg.
 The Chairman of the Board is Frank Wagener
 Chief Executive Officer is Robert Scharfe.
 Chief Executive Officer is Robert Scharfe.
 The Exchange has pre-opening sessions from 07:15am to
09:00am and normal trading sessions from 09:00am to
05:35pm on all days of the week except Saturdays, Sundays
and holidays declared by the Exchange in advance.
 A law establishing a stock exchange in Luxembourg was
passed on 30 December 1927. The company was
incorporated as the Société Anonyme de la Bourse de
Luxembourg on 5 April 1928, with an initial issue of 7,000
shares, each valued at 1000 francs.

29. Integrated Solutions for Funds

30. Why should list in LSE
 Help increase a fund’s potential investor base Institutional investors are restricted
in their type and allocation of resources unless such instruments are listed on a
recognized stock exchange
 Improve disclosure and transparency
 Increase visibility and enhance profile
 Liquidity and pricing dissemination
Tax considerations
 Tax considerations
 Flexibility on structures that can be listed
 Benefits of Trading in LSE
 Continuous trading in real time without delays
 Transparency
 No minimum investment
 All types of orders permitted
 A regulated and monitored market place
 Principle of independence: Optimized processes and Guaranteed execution

31. German Stock Exchange
 The Frankfurt Stock Exchange (German: Börse Frankfurt, former
German name Frankfurter Wertpapierbörse - FWB) is the world's
12th largest stock exchange by market capitalization.
 It has operations from 8:00 am to 10:00 pm (German time)
 Frankfurter Wertpapierbörse (FWB, the Frankfurt Stock
Exchange) is one of the world's largest trading centres for
Exchange) is one of the world's largest trading centres for
securities. With a share in turnover of around 90 per cent, it is the
largest of Germany's seven stock exchanges.
 How to invest in German stock market from India?
 Resident Indian can open an overseas trading account with an
Indian broker having tie-up with international brokers such as
ICICI Direct, HDFC Securities, Kotak Securities, and Axis Securities
etc. or directly open an account with a foreign broker having
presence in India like Charles Schwab, Ameritrade, Interactive

33.  The DAX index, the best known German stock
exchange barometer, measures the performance of the
40 largest companies on the German stock market. It
represents around 80 percent of the market
capitalisation of listed stock corporations in Germany.
What Does DAX (Deutscher Aktienindex) Mean
capitalisation of listed stock corporations in Germany.
 The DAX Index is the benchmark index for the German
equity market. It tracks the performance of 30 selected
German blue chip stocks traded on the Frankfurt Stock
Exchange, which represent around 80 percent of the
market capitalization listed in Germany.

34. France Stock Exchange
 Euronext Paris is the securities market, formerly known as
the Paris Bourse, which merged with the Amsterdam, Lisbon,
and Brussels exchanges in September 2000 to
form Euronext NV.
 As of 2022, the 795 companies listed had a
 As of 2022, the 795 companies listed had a
combined market capitalization of over US$4.5 trillion.
 Euronext Paris, the French branch of Euronext, is Europe's
second-largest stock exchange market, behind the London
Stock Exchange.
 In November 2022, it became Europe’s largest stock
exchange, overtaking the London Stock Exchange, the first
time since 2003. Soon after, the LSE retook its position.

35.  Now part of Euronext N.V., the Paris Stock Exchange, officially
Euronext Paris, trades both equities and derivatives and posts
the CAC 40 Index. The CAC 40 index is made up of 40 notable
French companies with the highest market caps.
 What is the main stock index in France?
 What is the main stock index in France?
 The CAC 40 Index is a benchmark French stock market index. It
tracks the performance of 40 companies selected among the top
100 market capitalization and the most active listed equities traded
on the NYSE Euronext Paris. The CAC 40 Index is free floating,
modified capitalization-weighted index.